【正文】 ? Business/strategic review – market trends – customers and suppliers – petitors – costs, technology – valuation/full potential assessment Bain Activities: ? Industry profile ? Target screening ? Target approach ? Quantify current operating value, stand alone operating improvements, and potential synergies ? Preplanning – bined cash flows ? Transition plan ? Cost reduction ? Revenue enhancement ? Make better decisions upfront ? Provide agenda for postacquisition change ? Improve success in closing deal Common Pitfalls: ? Drawing up inplete list of candidates ? Use of screen process to develop a strategy ? Nonidentification of deal breaker issues ? Misunderstanding of cost savings and upside opportunities ? Ignore market dynamics and petitor impact on future cash flows ? Taking management projections at face value ?Reluctance to interfere in operations of acquiree Bain has considerable experience in the different skill sets needed at different stages in the acquisition process. Integration Valuation Due Diligence Acquisition Screening Bain MA 30 Bain Approach Bain and Other Advisors39。 Role Bain39。s Role: ? Analyze quality of customer and supplier base ? Look for potential cost savings and upside synergies ? Understand market dynamics to better project market and pany growth objectives ? Construct a discounted cash flow model that values stand alone, operating improvements and potential synergies ? Provide a reality check on market valuations ? Active involvement in transition plan, cost reduction and revenue enhancement opportunities ? Handson driver of change process to realize full value of merged entity ? In tandem with accountants, analyze financial projections based on managerial input Investment Banks: ? Value based on prices of parable businesses recently bought or sold ? Multiple of earnings/cash flow, assets ? Little or no direct input in postmerger activities ? Limited external research – largely dependent on managerial projections Accounting Firms*: ? Determine targets based on corporate objectives and strategies ? Identify acquisitions that enable the acquirer to: – perate new markets – acquire capabilities – gain scale advantage – improve relative market position ? Comb for potential acquisition candidates based on availability ? Utilize contacts to build a wide list of potential targets ? Look for potential acquisition candidates based on availability ? Use contacts to build list of potential targets ? Value based on prices of parable businesses recently bought or sold ? Construct a basic DCF model ? Little or no direct input in postmerger activities Bain provides a neutral, thirdparty view and analysis on the primary strategic and financial issues. Notes: *Consulting branches of Big Six Accounting Firms. Integration Valuation Due Diligence Acquisition Screening Bain MA 31 Bain Approach Roles and Responsibilities 848704a2d0119 0% 20% 40% 60% 80% 100% Percent of Professional Time ? Screening study ? Portfolio ? Norm bands ? Key issues investigation ? Intrinsic cash flow valuation ? How, what and when to say ? Scripts ? Nonoffer letter ? Terms ? Support as needed ? Legal Due diligence ? Prospectus ? Other document ation ? Scripts ? Due diligence ? Presentation to both boards ? Market valuation ? How, what and when to say ? Price ? Terms ? Support as needed ? Presentation to board ? Letter of fort ? Due diligence ? Pro formas Accountants Bain Lawyers Investment Banks Identify candidate Due Diligence Valuation Development approach Develop offer and deal structure Negotiate Board approvals Implement Bain is an integral part of a dedicated team of MA professionals. Bain MA 32 Bain Approach Acquisition Screening 848704a2d0120 Objective: ?Identify potential candidates which present best fit in terms of: – relatedness – impact on market position Bain Activities: ?Industry profile ?Target screening ?Target approach Common Pitfalls: ?Drawing up inplete list of candidates ?Use of screen process to develop a strategy Finding potentially attractive targets is the critical first step in an MA process. Integration Valuation Due Diligence Acquisition Screening Bain MA 33 Acquisition Screening (Common Mistakes) Bain Approach ?Review all potential candidates and determine which ones present the best fit in terms of: –relatedness –impact on market position Objective: ?Drawing up an inplete list of candidates, excluding divisions of large panies and very small panies ?Using the screening process to develop the strategy ?Saying –We can39。t buy it because... –They have turned us down before –The government won39。t approve it or –It39。s family/state/petitor/or big pany owned ?Making the wrong contact at the target pany ?Being impatient with acquisition process ?Assuming no really means no Common pitfalls: Inadequate screening of candidates is monplace. Bain MA 34 Candidate Screening Process Bain Approach Focus of analysis: Broad screen Fine screen Thorough analysis Market position Relatedness Value creation Screening criteria: ?Industry sector ?Company size ?Company growth ?Market share ?Financial performance ?Key success factors ?Competitive position (costs/customers) ?Opportunity for synergies ?Standalone value of synergies/ performance improvement potential ?Management/cultural considerations Objective: ?Rapidly narrow down universe of panies ?Provide shortlist of candidates ?Detailed assessment of remaining candidates Bain39。s a